5 Ways To Holistically Define Segments

Human behavior is driven by beliefs, emotions, instincts, habits, and needs. The most powerful market segmentations offer a 360-degree understanding of how these elements interact to motivate consumers to use your category, as well as what priorities drive consumers’ brand choices within the category.

While many segmentations capture all these elements of human behavior in a qualitative illumination phase, most quantitative segmentations rely solely on rational measures instead of tapping into the customer’s subconscious or emotions. At Material, we know that people aren’t always rational or predictable. In order to gain a holistic picture of different buyers in your category, we may tap emotional and less conscious drivers when statistically defining segments.

Here are five tips to create the most impactful and holistic market segmentations:

1. Tap some System 1 thinking

Many categories involve fast, automatic, and intuitive choices that occur with little or no deliberate thought. This is referred to as System 1 thinking, which consumers are rarely aware of.

But if you ask consumers rational questions about their priorities or choices, they will engage in conscious, slower System 2 thinking. This may lead them to tell you what they believe to be the right answer rather than the real answer. To bypass some of this post-rationalization bias, Material has developed a visuals-based measurement process where people choose between two opposing images that represent their choices or preferences.

For example, would you choose fruit or baked goods? Do you prefer a nightclub or a cozy night on the couch? Do you cook from scratch or pop a frozen entrée in the microwave? Do you choose the single-use or reusable water bottle?

The respondent makes a rapid and holistic assessment of the images without applying labels that may trigger unwanted associations, self-judgment, or social desirability bias. As a bonus, since it’s a fun survey task, it can also boost respondent engagement and thus data quality.

2. Use emotional states to inform segments

Many categories are triggered by emotional states, such as smoking to reduce stress or snacking to alleviate boredom. Other categories, like insurance or investing, involve emotions such as fear or uncertainty during the decision process. Understanding how a consumer usually feels when they buy or use your category can reveal which triggers to leverage, benefits to promise, or tone to adopt.

It’s unwise to classify respondents based on real-time emotions, however, because those fluctuate over time and are therefore an unstable foundation for segmentations. Instead, we measure the typical feeling that precedes or accompanies use of the category or brand. This allows us to avoid physiological measures of emotion such as EEGs or pupil dilation, which would not be readily usable in the short-form typing tools needed to conduct follow-up research.

Instead, we use the self-reported Emotion Circumplex, which classifies consciously recognized emotions based on positive/negative valence and high/low arousal. In some categories, other types of feelings that are more cerebral than emotional (such as confidence or uncertainty) may be measured instead.

3. Use BASE human needs in addition to category specific ones

There are two types of needs to consider in your attitudinal segmentation: category-specific requirements and BASE needs:

1. Category-specific requirements are typically functional benefits, such as “high protein,” “low sugar,” “healthy,” and “durable.” These tend to drive choices between specific products that deliver specific ingredients or a particular experience.
2. BASE needs (Belonging, Appeal, Security, and Exploration) tend to reflect the fundamental benefits a customer is seeking from the category, as well as the badge value associated with the price point or brand equities.

While BASE needs may seem relevant only to consumer categories, they also drive business decision-making and should not be overlooked. At Material, we have tools for classifying consumers or business decision-makers into segmentations defined by just their BASE needs; but your custom-crafted market segmentation might also benefit from measuring category-specific versions of those needs.

4. Differentiate your segments from their needs

The needs that drive a one-time category purchase (as well as those that consistently determine a customer’s choices over time) can inform a segmentation while those that vary by occasion should not.

In categories that involve occasion-specific buying, it’s best to ignore varying need states when grouping consumers to form your brand target(s). Instead, we recommend separately defining needs that drive occasion-specific brand or product choices, which will allow you to expand usage of your brand and align your portfolio with the different use cases experienced by your target segments.

The exception is categories such as streaming services or credit cards, where customers acquire a product or service but choose between competitors whenever they use the category. If you know which needs your category fulfils, you’ll be able to more effectively meet (and market based upon) the needs of your target segments.

In this case, you’re not promoting yourself as the solution to individual need states but will understand which ones are most relevant to your audience. In categories such as these, you must first define the jobs to be done, which can then be incorporated into the holistic view that drives your person segmentation.

5. Remember that behavioral segmentation is only sometimes the answer

Simply knowing what, when, or how much consumers buy doesn’t help you understand why they buy, so a segmentation based only on buying behavior is unlikely to improve your strategy or messaging.

If the first- or third-party data that you capture or buy regularly reveals the defining behaviors of your segments, then behavioral segments can be a powerful email marketing tool to trigger repeat or related purchases; but a survey-based segmentation using unreliable self-reported buying behavior is less actionable.

General tendencies (such as trading up versus bargain hunting) are useful segmentation inputs, but the shares of units going to Brand A and Brand B probably are not. Besides, you don’t want people to move out of a target segment into a non-target segment simply because they start buying more of your brand!

In a nutshell, if you want to capture a 360-degree view of your customers—from their practical needs to their subconscious emotional triggers—it’s essential to make sure your segmentation inputs are holistic.